Program Evaluations

The Inspector General (IG) conducted a FY 2009 Assessment addressing the Commission’s Most Serious Management Issues. The IG’s 2009 Assessment is located in the Other Accompanying Information section of the PAR at http://www.cftc.gov/About/CFTCReports/index.htm.

In FY 2009, two external evaluations involving the CFTC were conducted by the U.S. Government Accountability Office (GAO):

Issues Involving the Use of the Futures Markets to Invest in Commodity Indexes, GAO-09-285R, January 30, 2009

GAO conducted this study at the request of the House Committee on Agriculture. In summary, until mid-2008, prices for a broad range of physical commodities, from crude oil to crops such as wheat, had increased dramatically for several years—leading to concerns and debate over the possible causes. The GAO was asked to address the following: 1) whether the Federal law governing futures trading prohibits investors from using the futures markets to gain an exposure to commodity indexes; 2) whether the Federal law governing pension plans prohibits them from investing in commodities through the futures markets; 3) how margins have affected the ability of investors to obtain exposures to commodity indexes; and 4) how position limits have affected the ability of investors to obtain exposures to commodity indexes.

GAO’s findings and conclusion are available on its Web site at http://www.gao.gov.

Bank Secrecy Act: Federal Agencies Should Take Action to Further Improve Coordination and Information-Sharing Efforts, GAO-09-227, February 12, 2009

GAO conducted this study of the Bank Secrecy Act (BSA) enforcement program administered by the Financial Crimes Enforcement Network (FinCEN), a bureau of Treasury, in which the CFTC has been delegated compliance examination authority. The goal of the study was to identify opportunities that exist to improve FinCEN’s interagency coordination with the Federal banking regulators, SROs, and state agencies.

Two recommendations were made involving the CFTC. The first recommendation was that CFTC should direct the appropriate staff to consider developing or using an existing process to share and discuss regularly information on BSA/ anti-money laundering examination procedures and general trends in a nonpublic setting. In response to the GAO’s recommendation, CFTC has been included in Federal Financial Institutions Examination Council (FFIEC) working group meetings with the Federal banking regulators and the FinCEN. CFTC now also participates in a number of other interagency groups, including the Data Management Council and the Bank Fraud Working Group, which CFTC believes allows for significant information sharing, including information regarding examination procedures.

The second recommendation was that CFTC should consider including the SROs that conduct BSA examinations in interagency meetings. This recommendation was not implemented. SROs have not been included in interagency meetings because concerns have been raised about whether the involvement of the private sector SROs would cause the meetings to fall under the Federal Advisory Committee Act. Moreover, discussions of specific suspicious activity report (SAR) details have occurred in past interagency meetings that would cause the SROs to have access to SARs that was not envisioned in the BSA and other applicable laws.

GAO’s findings and conclusion are available on its Web site at http://www.gao.gov.